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Norwegian pension reform Defined benefit versus defined contribution

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Norway. The new system fulfils several criteria for a defined contribution scheme. Earnings from all years in work count in the accumulation of entitlements, and an actuarial rule converting the final balance into an annuity is introduced. But the pension system will still be a part of the general public finances and therefore financed pay-as-you-go. And before taking adjustments for increasing life expectancy into account, the level of old age pension benefits is calibrated to the former defined benefit system. The paper shows that given these restrictions it is of minor importance if the new pension system is described as defined benefit versus defined contribution. One modification follows from the treatment of inheritance of entitlements from persons who die before the lower age limit of retirement. The discussion is illustrated empirically by using Statistics Norway's dynamic microsimulation model MOSART.

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  • Dennis Fredriksen & Nils Martin Stølen, 2011. "Norwegian pension reform Defined benefit versus defined contribution," Discussion Papers 669, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:669
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    References listed on IDEAS

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    6. Eduardo A. Haddad & Jaime Bonet & Geoffrey J. D. Hewings, 2023. "Introduction and Overview," Advances in Spatial Science, in: Eduardo A. Haddad & Jaime Bonet & Geoffrey J. D. Hewings (ed.), The Colombian Economy and Its Regional Structural Challenges, chapter 0, pages 1-16, Springer.
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    Cited by:

    1. Dennis Fredriksen & Erling Holmøy & Birger Strøm & Nils Martin Stølen, 2015. "Fiscal effects of the Norwegian pension reform. A micro-macro assessment," Discussion Papers 821, Statistics Norway, Research Department.

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    More about this item

    Keywords

    Pension systems; pension reform; life expectancy adjustment; microsimulation.;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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